Wednesday, February 20, 2008

Promises, Promises...Sub priming Social Security

For years now, we’ve been encouraged to worship at the altar of “ownership”. Whether it’s sub-prime mortgages we can’t afford or risky Social Security private accounts riding the Wall Street roller coaster, Americans have been promised great things from an “ownership” society. As Providence Journal’s Froma Harrop wrote in a column this week:

How interesting that the buildup to the mortgage meltdown employed many of the same sales tactics as the Social Security privatization scheme. Resentment, fear, flattery and hype — plus scant details on fees and other costs — all went into the pitch.

And Harrop correctly draws yet another comparison.
If the folks now approaching retirement saw their private Social Security accounts suddenly lose 10 percent of their value — as have many conservative stock portfolios — we'd be hearing demands for a Social Security bailout on top of a mortgage bailout...As a taxpayer, I'm relieved that Americans who don't read their sales contracts and assume that prices can't fall didn't have an opportunity to hand their Social Security money over to Wall Street. This should be the deal: The workers may invest, spend or gamble their money as they please — but not before something gets taken out of their paychecks for a boring but reliable Social Security benefit that they can't mess with.

And that’s really the point, isn’t it? Social Security is reliable and guaranteed. It’s not supposed to make us rich; it’s designed to prevent us or our families from slipping into poverty during old age, disability or premature death.

Boring? Maybe. But it’s certainly better than the privatization myth peddled to American taxpayers by an administration determined to dismantle Social Security.

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